1. Pump-Off Controllers Chris Patterson Production Group Athabasca Oil Sub Business Unit Canadian Foothills & Frontier Region August 23, 2004

2. Agenda n Pelican Lake Overview n Theory of Pumped-Off n Current Well Optimization Techniques n What are Pump-Off Controllers? n Results from Pump-Off Controller Test n Economic Evaluation n Recommendations Pump-Off Controllers

3. Pelican Lake Oil 500 Producing Horizontal Wells 22,000 Barrels/Day (Heavy Oil) Secondary Recovery – Waterflood 180 Water Injectors Pump-Off Controllers

4. What is Pumped Off? Pump-Off Controllers Darcy’s Eqn Flow α ΔP

5. Current Well Optimization Technique Fluid Shot -> Change Speed -> Fluid Shot -> Change Speed Pump-Off Controllers Fluid Gun Echo Meter

6. Calling to Change Speed Control Room: Please speed up from 100 to 130 rpm Pump-Off Controllers

7. Current Optimization Techniques AdvantagesDisadvantages n Standard oilfield practice n Safe and reliable n Good production n Time consuming n “Snap Shot” of fluid level n Infrequent tests n Requires testing equipment n Not completely pumped-off Pump-Off Controllers

8. Project Scope n Researched potential vendors with pump-off controllers. n Installed 8 Pump-Off Controllers from 4 vendors and ran trials – No cost to EnCana. n Reviewed results. n Obtained formal quotes c/w installation costs. n Recommended pump-off controller strategy with economic justification. Pump-Off Controllers

9. Vendor/Controllers Evaluated: Pump-Off Controller Units n StellarTech n Grizzly Electric n Lufkin Automation VFD Pump-Off Controllers (Software Upload) n Wermac Electric Pump-Off Controllers

10. What we currently have Pump-Off Controllers Top Drive Wermac Variable Frequency Drive SCADA

11. Where the Pump-Off Controller Fits In Top Drive Wermac VFD SCADAController Flow Sensor Pump-Off Controllers

12. VFD Pump-Off Controllers Top Drive Wermac VFD SCADA Wermac Flow Sensor Pump-Off Controllers Software Upload

13. Test Results n StellarTech – Controller unsuited for application. n Grizzly Electric – 15% increase in production. Controller algorithm requires further modification. n Lufkin Automation – Initial install problems. Just installed (no data). n Wermac Electric – 28% increase in production. Best overall Pump-Off Controller. Pump-Off Controllers

14. Controller Evaluation – Wermac n Operator’s are familiar with Wermac VFD’s. n No need for physical controller. n No cost for software. n Controller algorithm is robust and versatile. n Proven in Pelican Lake field trials. n Good customer service and technical help. Pump-Off Controllers

15. Results – Controller Off RPM Floco Flow (m^3/day) Accumulated Volume (m^3) Average Production: 41 m^3/day Pump-Off Controllers

16. Results – Controller On Average Production: 52.5 m^3/day RPM Floco Flow (m^3/day) Accumulated Volume (m^3) Thermal Flow % 28% Increase in Production Pump-Off Controllers

17. Economic Results: n NPV After Tax @ 9%: 68 M$ n After Tax ROR: 100% n Payout Period: 7.1 months n PIR @ 9%: 3.92 M$/M$ All EnCana economic hurdles met and exceeded! Pump-Off Controllers

18. Pump-Off Controllers: AdvantagesDisadvantages n Optimized fluid levels n Increased production n Optimize operator time n Simple to operate n Increased pump-life n Additional capital required n Increased maintenance costs Pump-Off Controllers

19. Recommendations: n Continue testing of controllers. n Install Wermac controllers on new infill pad under primary production (Pad NE-65) – in progress. n Include funds in 2005 Capital Budget for Wermac pump-off control – accepted. n Test using existing floco meter to replace thermal flow sensor. Pump-Off Controllers